Renault Plans $1.8 Billion China JV, Business News Says

July 8 (Bloomberg) -- Renault SA will sign an agreement
this month to form an 11 billion yuan ($1.8 billion) venture in
China with Dongfeng Motor Group Co. to produce vehicles in the
world’s largest auto market, China Business News reported.

The venture with Europe’s third largest automaker may be
injected into Dongfeng’s Hong Kong-listed unit, the Shanghai-based newspaper reported today, citing an unidentified executive
at the Chinese company. Dongfeng spokesman Zhou Mi couldn’t
immediately comment, while Renault’s Boulogne-Billancourt,
France-based spokeswoman Raluca Barb said the company is
awaiting final approval from the Chinese authorities.

Forming the venture with Dongfeng would give Renault an
alternative source of revenue from the Western Europe market,
which contributed 60 percent of Renault’s sales last year.
European car sales fell to a 20-year low in May as rising
joblessness caused by a recession in the euro region cut demand.
Renault Chief Executive Officer Carlos Ghosn said on July 6 the
European car market will probably continue to contract in 2014
and 2015.

Wholesale deliveries in China of cars, multipurpose and
sport utility vehicles increased 9 percent to 1.4 million units
in May, according to the state-backed China Association of
Automobile Manufacturers. That compared with growth of 13
percent in April and 13.3 percent in March.

Dongfeng and Renault received approval in May from the
Ministry of Environmental Protection to build an assembly plant
in Wuhan with an annual capacity of 150,000 units, according to
a statement on the ministry’s website.

Renault, which had 95 dealerships in China at the end of
2012, sold 29,724 vehicles in the country last year, according
to the company.